JP Morgan thinks the DeFi industry is shrinking after the Curve Finance exploit.
The Curve Finance exploit has created distrust in the DeFi industry. However, explanations and comments about the sector continue to come.
JP Morgan made statements after Curve Finance hack
According to JPMorgan analysts, the recent Curve Finance attack seems to have affected the DeFi ecosystem. However, its influence on DeFi is thought to be under control. Still, the DeFi ecosystem in general remains in shrinking or stalling mode.
On Sunday, Curve Finance suffered an abuse that put more than $100 million in loans owned by founder Michael Egorov at risk of liquidation. Egorov took out multiple loans on various DeFi lending platforms using the CRV token as collateral. This created a huge risk of credit liquidation that could put pressure on other DeFi protocols.
The attack took place in Curve Finance’s four main liquidity pools due to a vulnerability in a programming language called Vyper, which is widely used in DeFi applications. However, Egorov acted quickly, trying to avoid liquidation by selling CRV assets and paying off debts. Despite this, it is known that Egorov still has debts and collateral.
To bail out Curve Finance, several major investors such as Tron founder Justin Sun, Huobi co-founder Jun Du, crypto trader DCFGod and Mechanism Capital co-founder Andrew Kang have made a coordinated effort. According to JPMorgan analysts, such coordination limits the contagion effect.
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